in Air Transport

Comair unlikely to start operating before November

Posted 3 June 2020 · Add Comment

More bad news for South African Aerospace as Comair announces it is unlikely to start operating again before November this year.

 

This is notwithstanding the easing of restrictions on air travel as the airline requires a substantial cash injection, the company’s business rescue practitioners have told creditors and employee representatives.

 

The aircraft are currently in a preservation programme to ensure that they are ready to fly again, the resumption of operations now, would however require securing fuel suppliers and covering numerous other costs which the airline would not be able to meet without a significant cash injection.

 

The business rescue practitioners confirmed they were in discussions with funders to recapitalise the airline in order to resume domestic passenger operations by 1 November. Over 30 potential funders had been contacted and six are progressing discussions. 

 

To ensure the future sustainability of the airline, Comair had acquired Infinea’s 50% shareholding of Nacelle. The negotiations began before Comair entered business rescue and the deal will give it full control of IT infrastructure, customer data, flight systems and support services. Comair is not able to fund the deal now. It has agreed to pay in instalments over 17 months once funding has been secured. 

 

The practitioners said the proposed business rescue plan would include the rationalisation of the current fleet from 27 aircraft, including the grounded Boeing 737 MAX8, to 13 737-800s and three spare 737-400s.

 

The business rescue practitioners had consulted extensively, both in South Africa and abroad, and it was considered that a downsized fleet would be more in keeping with what the company could afford to operate and demand for air travel post the Covid-19 crisis.

 

Shaun Collyer, one of the business rescue practitioners, said that employees had been placed on unpaid leave and retrenchment proceedings are continuing under the auspices of the CCMA.

 

“This unfortunate hardship has been imposed on Comair employees as a consequence of the Covid-19 lockdown and State-of-Disaster Act.”

 

Comair would focus on its airline business.

 

Creditors would be paid according to the probable liquidation dividend determined in accordance with the provisions of the Companies Act through:

 

The sale of non-core assets;

Any equity capital raised and/ or;

The issuing of shares.

The target date for this is 31 October 2020.

 

In terms of the restructuring plan, it is likely that the existing shareholder base will be substantially diluted.

 

The business rescue practitioners intend to have substantially implemented the plan by 31 March 2021, at which point the company will be handed back to the board of directors and management.

 

 

* required field

Post a comment

Other Stories
Advertisement
Latest News

Emirates resumes flights to Addis Ababa

Emirates will resume services to Addis Ababa from August 1.

Ghana gets independent accident investigation proposal

Ghana is to establish an Accident Investigation and Prevention Bureau through its Aviation Ministry to improve its air safety management.

Dash 8-400 cargo flight crashes in Somalia

A de Havilland Canada Dash 8-400 belonging to Nairobi-based regional airline Bluebird Aviation crash-landed yesterday in Beledweyne in Somalia while carrying humanitarian aid to the city following recent floods.

Aviation recovery may take three years

The commercial aviation industry’s rebound from COVID-19 is underway, with the number of airline flights starting to gradually increase, but widespread recovery could take several years.

MEBAA to display future global business aviation trends

The MEBAA Show, the Middle East’s leading business aviation platform, is set to return to Dubai, taking place on 08-10 December 2020 at DWC, Airshow Site.

SAA creditors confirm rescue plan

South African Airlines (SAA) is on track for a relaunch after creditors of loss-making national carrier have approved a rescue plan on which requires at least $596 million in new funding – which now falls on the South African government to

See us at